KARACHI:

The Pakistan Stock Exchange (PSX) staged a sharp recovery on Friday, with the benchmark KSE-100 index surging 2,780 points or 2.67% day-on-day, as investors reacted positively to a mix of encouraging developments.

The sharp rally was driven by easing regional tensions, record-low inflation data, and renewed hopes of monetary policy easing in the upcoming State Bank of Pakistan (SBP) meeting on May 5.

Additionally, optimism surrounding the upcoming IMF Executive Board meeting, which is expected to review Pakistan’s next bailout tranche, further boosted investor confidence.

Index opened on a positive note, aided by heavy stocks such as bank and power and swung between intra-day high of 114,546.88 and intra-day low of 112,820.08. The late-week rebound helped limit the index’s overall weekly decline to just 1.17%.

“Stocks showed sharp recovery after the US and UN urged Pakistan and India to defuse tensions,” said Managing Director Arif Habib Corp Ahsan Mehanti.

He added that reports of 0.3% year-on-year inflation measured by Consumer Price Index for April’25 are likely to further ease the SBP policy, and the expected approval on disbursement of the IMF tranche this month played the role of catalysts in the record bullish close at PSX.

At the close of trading, the benchmark KSE-100 index posted a surge of 2,787.36 points, or 2.50%, and settled at 114,113.94.

Arif Habib Limited (AHL) wrote the market rebounded sharply on Friday, rising 2.67% day-on-day (DoD) and trimming the weekly loss to 1.17%. Gains were led by United Bank (+8.45%), Engro Fertilisers (+5.15%), and Meezan Bank (+3.74%), while Pakgen Power (-5.97%), AGP limited (-3.52%), and Pakistan Tobacco Company (-2.72%) weighed down the index, AHL added.

Headline inflation for Apr’25 dropped to a historic low of 0.28% YoY, down from 17.34% a year ago and 0.69% in Mar’25.

This pulled average inflation for 10MFY25 down to 4.73% from 25.97% in the same period last year.

Market sentiment next week will depend on Pakistan-India developments, with support at 110k and resistance at 117k.

Topline Securities wrote that the KSE 100 Index rebounded on Friday after remaining under pressure for two consecutive trading sessions.

This recovery in the market can be attributed to statements by the US administration indicating that they are working to ensure that tensions between India and Pakistan don’t escalate into a broader regional conflict.

The top positive contributions to the index came from United Bank, Engro Fertiliser, Hub Power, Lucky Cement, Meezan Bank and Habib Bank, as they cumulatively contributed 1,238 points to the index.

KTrade Securities wrote in its market wrap that the market’s sentiment improved significantly, driven by the US’s involvement in engaging Pakistan and India to resolve the ongoing conflict.

Big blue-chip stocks led the charge, with commercial banks, cements, oil and gas, and fertilisers sectors contributing to the index’s gains.

Insight Securities Head of Sales, Ali Najib said predicted that going forward, investors will remain anxious about the outcome of the Monetary Policy Committee meeting, which is scheduled on May 5, 2025 and the IMF Board of Directors (BoD) meeting for Pakistan set for May 9, 2025.

In the first event of next week, the market is expecting the SBP to cut benchmark interest rates by 0.5% – 1%, as per the results of different surveys.

Overall trading volumes stood at 372.4 million shares compared with the previous session’s tally of 491 million. The total traded value stood at Rs23.3 billion.

Shares of 445 companies were traded in the ready market. Of these, 331 closed higher, 63 fell, and 51 remained unchanged.

Sui Southern Gas led the volumes with 29.4 million shares, gaining Rs2.98 to close at Rs40.25. It was followed by Cnergyico PK with 27.4 million shares, up Rs0.02 to close at Rs7.11, and The Bank of Punjab with 20.9 million shares, rising Rs0.57 to close at Rs9.69. During the day, foreign investors sold shares worth Rs1.12 billion, according to the NCCPL.